Release Date: 03/ 01/ 2005
CONTACT: Rob Ikard, (615) 872-5855 or Jim Brown, (615) 874-5288
New NFIB Survey Reveals Cost of Health Insurance a Significant Concern
TENNESSEE -- Tennessee's overall business climate is supportive of small business, though it lags behind several of its neighboring states, according to the inaugural Tennessee Small-Business ConditionsSM report.
The report's data, which is the first compilation of its type, was released today by the National Federation of Independent Business/Tennessee. It provides an overview of small-business conditions within Tennessee and compares them with neighboring states.
A net 31 percent (positive percent minus negative percent) of respondents to a recent survey indicated Tennessee is supportive of small business. Comparatively, Georgia, North Carolina and Virginia registered a net 37 percent, net 36 percent and net 35 percent, respectively. In the Volunteer State, more than 47 percent said government officials, bankers, media outlets and community organizations are supportive or highly supportive of small business while more than 16 percent said those same entities are not supportive or not at all supportive.
"Overall, this Small-Business Conditions survey is solid proof Tennessee has a favorable climate for small business," NFIB/Tennessee State Director Rob Ikard said. "Tennessee is viewed as a business-friendly state nationally, but the survey indicates we still have ground to make up in certain areas relative to some of our peers. One real concern of Tennessee's small businesses is the lack of access to affordable health insurance."
In a spotlight question, Ikard said 31 percent of respondents indicated their employee health insurance premiums rose faster than other premiums, including workers' compensation (14 percent) and product or professional liability (13 percent).
A net 47 percent of the state's small employers believed business conditions in their market area are good, which was better than North Carolina (net 38 percent) but behind Georgia (net 52 percent) and Virginia (net 53 percent). In Tennessee, a net 21 percent saw those conditions improving, which trailed Georgia (net 30 percent) and North Carolina (net 27 percent). A net 68 percent characterized the outlook for business over the next three months as good, citing sales prospects (46 percent) and greater productivity (14 percent) as primary reasons for their view.
A net 27 percent indicated that profits were "good," and a net 41 percent of those same respondents characterized sales as "good." Overall, a net 49 percent of small employers reported that over the last three months their purchasing prices rose, while a net 17 percent reported they had increased selling prices.
For information about the Small-Business ConditionsSM project and other small-business research studies conducted by the NFIB Research Foundation, visit www.NFIB.com/research.
| Tennessee Small-Business ConditionsSM | ||||||
| This chart shows the results from Tennessee and its comparative standing among selected nearby states. | ||||||
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 2/2005 | 31 | 37 | 30 | 36 | 35 |
| Prior qtr. | - | - | - | - | - | |
| Business conditions in market area | ||||||
| Net % "good" | 2/2005 | 47 | 52 | 43 | 38 | 53 |
| Prior qtr. | - | - | - | - | - | |
| Net % "improving" | 2/2005 | 21 | 30 | 21 | 27 | 24 |
| Prior qtr. | - | - | - | - | - | |
| Outlook for business | ||||||
| Net % "good" in next three months | 2/2005 | 68 | 73 | 70 | 70 | 71 |
| Prior qtr. | - | - | - | - | - | |
| Reason for optimism | ||||||
| % Sales prospects | 2/2005 | 46 | 41 | 50 | 57 | 43 |
| Prior qtr. | - | - | - | - | - | |
| % Lower costs | 2/2005 | 4 | 2 | 2 | 4 | 5 |
| Prior qtr. | - | - | - | - | - | |
| % Price increases | 2/2005 | 4 | 6 | 4 | 2 | 5 |
| Prior qtr. | - | - | - | - | - | |
| % Greater productivity | 2/2005 | 14 | 15 | 15 | 17 | 12 |
| Prior qtr. | - | - | - | - | - | |
| % Government policy | 2/2005 | 6 | 5 | 5 | 2 | 7 |
| Prior qtr. | - | - | - | - | - | |
| Reason for pessimism | ||||||
| % Sales prospects | 2/2005 | 12 | 9 | 10 | 14 | 6 |
| Prior qtr. | - | - | - | - | - | |
| % Cost increases | 2/2005 | 12 | 9 | 10 | 21 | 19 |
| Prior qtr. | - | - | - | - | - | |
| % Pressure on selling prices | 2/2005 | 6 | 0 | 0 | 7 | 13 |
| Prior qtr. | - | - | - | - | - | |
| % Lower productivity | 2/2005 | 6 | 0 | 0 | 21 | 0 |
| Prior qtr. | - | - | - | - | - | |
| % Government policies | 2/2005 | 35 | 36 | 50 | 7 | 25 |
| Prior qtr. | - | - | - | - | - | |
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 2/2005 | 41 | 43 | 39 | 39 | 46 |
| Prior qtr. | - | - | - | - | - | |
| Profits | ||||||
| Net % profits "good" | 2/2005 | 27 | 26 | 23 | 24 | 31 |
| Prior qtr. | - | - | - | - | - | |
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 2/2005 | 16 | 20 | 17 | 20 | 27 |
| Prior qtr. | - | - | - | - | - | |
| Per employee payroll cost | ||||||
| Net % "risen" | 2/2005 | 15 | 18 | 25 | 16 | 14 |
| Prior qtr. | - | - | - | - | - | |
| Employee cost pressures (greater) | ||||||
| % Wages | 2/2005 | 58 | 57 | 59 | 57 | 61 |
| Prior qtr. | - | - | - | - | - | |
| % Benefits | 2/2005 | 24 | 27 | 29 | 24 | 25 |
| Prior qtr. | - | - | - | - | - | |
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 2/2005 | 41 | 43 | 39 | 41 | 42 |
| Prior qtr. | - | - | - | - | - | |
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 40 | 39 | 44 | 47 | 36 |
| Prior qtr. | - | - | - | - | - | |
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 2/2005 | 31 | 43 | 38 | 48 | 41 |
| Prior qtr. | - | - | - | - | - | |
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 2/2005 | 56 | 58 | 55 | 58 | 52 |
| Prior qtr. | - | - | - | - | - | |
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 2/2005 | 36 | 35 | 38 | 40 | 43 |
| Prior qtr. | - | - | - | - | - | |
| % All credit needs not satisfied | 2/2005 | 5 | 7 | 6 | 6 | 5 |
| Prior qtr. | - | - | - | - | - | |
| % No credit needs | 2/2005 | 56 | 53 | 53 | 51 | 49 |
| Prior qtr. | - | - | - | - | - | |
| Tenn. | Ga. | Mo. | N.C. | Va. | ||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 2/2005 | 49 | 48 | 54 | 54 | 42 |
| Prior qtr. | - | - | - | - | - | |
| Selling prices (last three months) | ||||||
| Net % increased | 2/2005 | 17 | 12 | 21 | 17 | 14 |
| Prior qtr. | - | - | - | - | - | |
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 2/2005 | 10 | 13 | 12 | 17 | 13 |
| Prior qtr. | - | - | - | - | - | |
| Single most important business problem | ||||||
| % Weak sales | 2/2005 | 9 | 10 | 7 | 11 | 7 |
| Prior qtr. | - | - | - | - | - | |
| % Taxes | 2/2005 | 12 | 11 | 14 | 9 | 10 |
| Prior qtr. | - | - | - | - | - | |
| % Employee quality/costs | 2/2005 | 12 | 9 | 10 | 11 | 11 |
| Prior qtr. | - | - | - | - | - | |
| % Insurance | 2/2005 | 14 | 21 | 17 | 15 | 15 |
| Prior qtr. | - | - | - | - | - | |
| % Big-business competition | 2/2005 | 15 | 11 | 12 | 15 | 16 |
| Prior qtr. | - | - | - | - | - | |
| % Inflation/Rising prices | 2/2005 | 12 | 11 | 12 | 16 | 8 |
| Prior qtr. | - | - | - | - | - | |
| % Credit availability/Interest rates | 2/2005 | 4 | 4 | 4 | 4 | 6 |
| Prior qtr. | - | - | - | - | - | |
| % Regulations/Red tape | 2/2005 | 6 | 6 | 9 | 5 | 9 |
| Prior qtr. | - | - | - | - | - | |
| Tennessee Quarterly Spotlight | |
| Over the last year, which type of business insurance has had the most rapidly rising premiums? | |
| Vehicle collision and liability | 5% |
| Workers' compensation | 14% |
| Product or professional liability | 13% |
| Property and casualty | 11% |
| Employee health | 31% |
| Don't know/Refused | 26% |
| Total | 100% |
| Did those premium increases cause you to terminate or postpone planned business investments? | |
| Yes | 18% |
| No | 66% |
| Don't know/Refused | 16% |
| Total | 100% |
The Poll
NFIB’s Tennessee Small-Business ConditionsSM is a telephone survey of a random sample of Tennessee small employers regarding business conditions within the state. “Small employer” is defined here as employing between one and 250 people (not including the owner(s)) in a for-profit business. Each edition of the survey has a minimum of 350 respondents. The sampling error is ± 5 percentage points. Data are collected quarterly in the months of February, May, August and November, beginning in February 2005. The MRCGroup of Las Vegas conducts the survey for the NFIB Research Foundation.
The Sponsor
The NFIB Research Foundation is a 501 (c)(3) organization that provides policy-makers, media, educators, small-business owners and other interested parties empirically based information on small business and small-business owners. The Foundation is affiliated with the National Federation of Independent Business, the nation’s largest small- and independent-business advocacy organization, and is located in Washington, D.C.
